Wal-Mart in China alliance
Bid to boost Shanghai store numbers
October 11 2002
Wal-Mart has formed a joint venture with a Chinese finance business to push ahead with its hypermarket programme.
The deal with Citic, a financial services and utilities company based in the Shanghai region, will ensure Wal-Mart meets Chinese regulations preventing overseas companies owing more than 65 per cent of a business.
Wal-Mart currently has 22 hypermarkets on mainland China, compared to 28 operated by Carrefour. Six of Carrefour’s outlets are in the Shanghai region, on the east coast of China which is enjoying strong economic growth. German-owned supermarket operator Metro has also based its Chinese operation in Shanghai.
Citic has strong links with the central Chinese government, which has the final say on the speed at which overseas retailers are able to roll out stores.
US DIY retailer Home Depot has also opened an office in Shanghai, as well as in the province of Shenzhen. The offices will initally be used to for product sourcing, with China a key source of Home Depot merchandise, However, a foothold on the Chinese mainland will enable Home Depot to watch the progess of UK rival B&Q, which is rolling out hypermarkets across China.
